The global financial uncertainty has caused many people to put their savings into National Savings products due to the government backed guarantee which they attract. This is not limited to the £85,000 personal and small business limit which applies to Banks and Building Societies.
It should of course be remembered that any guarantee is just as good as the person or institution giving the guarantee. A state backed guarantee is not necessarily an absolute guarantee. If one looks back to the early years of the twentieth century, Imperial Russia was raising huge sums of money in an attempt to prop up its economy. The 1913, 4.5% Bond Loan for the Armavir-Touapse Railway Company (see photo) came with, "the absolute guarantee of the Imperial Russian Government." That was of little solace to investors in 1917 when there was a repudiation of Czar - era debt. Still the colourful engraved share certificates now provide cheap wall furniture.